On July 28th 2020 the Battle Ground school board met with the district superintendent, asst. superintendent and head of finance. This was a meeting to share information and get feedback as the district prepares for the August 24th budget meeting for 2020/21. No votes were taken and the public was not allowed to comment (although the public could listen). The budget session lasted about 1 hr 20 min and was the last item of the evening. I took 2 1/2 pages of notes that I will share in this article. I will report AND I will comment. I’ve spent the past 6+ years reviewing every annual budget for the district and providing comments, suggestions and asking questions. NEVER in that time has one penny of budget changed from what the district placed before the Board. So one might question why it makes any sense going back and repeating the cycle. The answer? Hope.
This is going to get detailed and will be flavored by my experiences and interpretations. I will share questions, conclusions and recommendations at the end of the article. I don’t ask nor expect everyone to agree with my views. I do hope this will stimulate taxpayers to ask questions and get information to make an informed decision when they are asked to vote.
The budget will get a public hearing on August 24th as a part of the regularly scheduled board meeting. That meeting will be online. Adoption will take place that evening. They must have it done by Sept 1st. One of the reasons to hold the meeting late in August it to minimize time for changes. If no one had attended this workshop (reported below) there would be no other notice. You will be able to find the link to the Zoom meeting by going to: https://www.battlegroundps.org/ then clicking about: board of directors: agendas and minutes: meetings (upper right): choose the meeting date on the left: see the camera icon and click that. The meeting info and agenda should be posted by Friday of the week prior to the meeting.
Without further ado here are the notes:
Meaghan (head of finance for the district) provided some background and showed some spreadsheets. [Those spreadsheet screen captures are below]
The district’s last 4 year levy runs out in 2021. This means that they will need to go to the voters in February and ask for a renewal of the levy. The last levy was approved at $3.66/$1000 of assessed value (AV). When the State of WA implemented their McCleary decision they raised state school property taxes ~$1/$1000 of AV BUT lowered the MAX local levy to $1.50/$1000 of AV. That went into effect January 2019. In the spring of 2019 the legislature raised the local levy back up to $2.50 IF the prior approved levy was at or above $2.50. [Editors note: This is apples and oranges. The last levy was under a completely different system. If voters knew that their levy rate approval could be used to arbitrarily raise the rate by the School Board without consulting the taxpayers the outcome may have been different.]
- Assistant principals are not paid by the State. They are a local levy expense
- WA State gives the district $71,640 per teacher. However, the average teacher in the district earns $82,396. That difference of $10,756 is paid via the local levy
- WA State pays for 106 admin support personnel. Battle Ground SD employs 128. The extra 22 are paid out of levy money
- WA State pays for 171 classified personnel. The BG SD employs 274. The extra 103 personnel are paid with local funds
- Classified personnel get a 3% wage increase in 20/21
- Salary and benefit costs are going up 5+% with the State covering ~1.6%
- Enrollment projections are budgeted for an increase of 150 students
- The increase in the levy in August 2019 of $1/$1000 AV was mostly allocated to capital improvements rather than operational expenses. [Editors note: Levy funds have been for operational expenses rather than capital improvements…until now]. Apparently the Board and district felt they needed more money for capital projects and legally could increase the levy rate to get the money.
- The projected increase in property values is 6% in 2020/21. Over the next 4 years that drops to 5% and then 3% (year 4 of the new levy)
- Anyone working at least 3.5 hours per day gets full benefits
- The increased monies from the State in 2018/19 went mostly to teachers and not to operating expenses
- 20-25 positions are currently unfilled but still in the budget
- WA State may reduce transportation subsides and BG spends ~$8mm per year
Meaghan went on to share some spreadsheets. I was able to get screenshots and am posting them here so we can tie the comments and questions to them. The bulk of the workshop was focused on discussing various levy rates and assumptions.[Editors note: there was genuine concern about the levy rate from the Board. Most of them appear to want to reduce the levy at least a few cents]
The workshop budget spreadsheet is intended to show the impact of different levy rates and their impact in 2021. It’s important to understand that the existing rate is $2.50/$1000 of AV. This was an increase of $1/$1000 implemented by the School Board at their August 2019 budget meeting without telling or consulting the public (it was legal). After the fact they said they had the legal right to increase the levy fo $1/$1000 of AV because the last levy rate was approve by voters at $3.66/$1000 of AV.
So, they now need to decide what to go to the public and ask for in 2021. If they reduced the levy to $2.35/$1000 of AV then the “blended rate” would be $2.42/$1000 (which is the $2.50 + $2.35 divided by 2). Note that if a home had an AV of $350,000 and the new rate was $2.35 then taxes would drop by $.15/$1000 in 2021 = $52.50.
Each of the columns shows the impact of lowering the levy rate.
Levy Budgeted Costs Sheet
- This shows the expense by category (in millions).
- Certificated, classified and admin salaries NOT covered by the State are about $10,760,000
- To cover all the positions and district operating expenses NOT paid by the State they project they need almost $29 million in 2020/21
- Until the 2017/18 school year we were on the “old” levy system.
- Starting in 2018/19 (specifically Jan 2019) the max rate dropped to $1.50 because the State increase property taxes and reallocated the money to the schools. [Editors note: Property owners saw massive increases in their taxes that year]
- As you can see from 2016/17 the budget went from $156,556,062 to $192,003,452 in 2019/20. That’s an increase of $35,447,390 = 22.6%.
- Inflation increased 7.41% from 2016 to 2020. That means that the district budget percent increase was 3.049x the inflation rate (22.6 vs 7.41)
Comparison between Clark County districts
- This chart was shared to show that when you combine the levy and capital bond rates Battle Ground is on the lower end.
- What they didn’t point out was that Battle Ground has the highest levy rate in Clark County. Battle Grounds last capital bond runs out in 2023 so BG isn’t carrying the bond debt some other districts do.
- After walking through the numbers and assumptions the balance of the meeting was a discussion about whether to ask for a levy rate lower than $2.50 and if so what that rate should be
- The consensus seemed to center around a rate of $3.25/$1000 = a $.15/$1000 decrease. [Editors notes: Note that in August 2019 the rate was $1.50 and the Board increased it to $2.50 and now is thinking giving something back would go over better]
- Lots of talk about the difficulties associated with the impact the State mandates are having on people working, lower income and burden.
- Some concerns about lowering the rate too much
- Some budget items are out of the districts control
- Benefit costs are going up rapidly with the local taxpayers on the hook
- Teachers union contract requires notice of RIF (reduction in force) be given in May before the district knows what the fall will look like. The Covid situation could lead to fewer personnel needed but the costs will persist
- 3.5 hrs work/day = full benefits. Where else does that happen?
- State mandates add millions of dollars in expenses with no reimbursement to the local budget
Items not discussed/considered
- What if enrollment declines? The district would get less money and they will need fewer personnel
- How does/will the public feel/respond to the increase of $1/$1000 in 2019 and then a reduction of say $.15/$1000 18 months later?
- What if property values decline? The district income would drop
- Could cuts be made and if so where? Given that ~80% of costs are personnel related some of the 100+ locally funded positions could be eliminated to reduce costs in these difficult times
- Should costs increase at 3x the inflation rate?
- Will online only learning change the personnel needs?
- No projections on loss of revenue and impact if student enrollment drops due to parents taking their children out of the system…this could be 5-7% of the headcount and would be a major income hit
- What are the costs of all new new software, hardware and training to deal with the Covid remote learning and what will not recur in subsequent years (that is more of a 1x cost)?
- In 2015/16 the BG SD spent ~$11,643 per student
- In the 2019/20 school year BG SD spent ~$14,718 per student
- In those 4 years the expense per student increase 26.41%
- In those 4 years inflation increased 8.17%
- That means that percent expense per student increased 3.23x the inflation rate
- How much is enough and how long can this continue?
- It’s clear that the Board Directors as well as district leadership are concerned about money and are trying to be good stewards…but…are they open to rethinking education?
- Why isn’t there any contingency planning for alternate scenarios?
If you have questions or thoughts about the budget or possible levy rate please reach out to the Superintendent and Board members as soon as possible. It will be decided on August 24th. If you don’t weigh in then don’t complain.
Here are the email addresses: https://www.battlegroundps.org/director-information/
Superintendent Ross email: email@example.com
Asst. Superintendent Waters: firstname.lastname@example.org